The Ridiculous History Of The Job And Dollar Loss Numbers Cited By IP Proponents

from the pulled-out-of-nowhere dept

Earlier this week, we talked about how the US Chamber of Commerce was citing the totally bogus stat that 750,000 jobs are lost in the US due to intellectual property violations. The original article tried to track down the source of the number and found a tangled web of government agencies all pointing at each other. Julian Sanchez has apparently been hot on the trail of the real source of that number, along with the equally bogus claim of $250 billion lost to IP infringement in the US. While it took plenty of digging, he seems to have found the origin of each number -- and they're both basically completely made up.

The 750,000 job number actually dates back to 1986, when then-Commerce Secretary Malcom Baldridge, in promoting a stronger copyright bill from the Reagan era, mentioned to a newspaper reporter that infringement cost anywhere from 125,000 to 750,000 jobs. That quickly morphed into "up to 750,000 jobs" and eventually just became "750,000 jobs" with no actual backing data. It's almost surprising that the industry hasn't tried to expand that number since, surely, infringement has become a bigger issue in the intervening 22 years. Of course, doing that might require actual proof, of which there is none, so that might present a problem.

As for the $250 billion, well, that's even weaker. It's gone through a number of versions of the game "telephone," and while it's often attributed to the FBI, they don't do studies like that. Instead, Sanchez eventually tracked it down to a brief aside in a 1993 Forbes article, where it wasn't even talking about losses in the US. Hell, it wasn't even talking about losses. It was talking about the size of the counterfeit market (which, as you know, does not equal losses) in the world. But, the number has been passed around over and over again -- and has been included in various government publications, so the industry (and politicians) take it as fact.
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Filed Under: bogus stats, copyright, history, stats

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  1. identicon
    Benjie, 8 Oct 2008 @ 9:29am


    "Counterfeit market != negative impact on legitimate sales?


    what you replied was taken out of context. we're not talking about Counterfeit, we're talking about pirating, but the original number came from Counterfeit.

    Even if you change it up to Pirating != negative impact on legitimate sales + sarcasm. you're still not entirely correct.

    eg. lets say I download a pirated version of MS SQL 2008 server enterprise which is like a $10k program.

    It costed MS no money for me to download it, yet you try to make a link out of a lost sale because you assume that EVERY user who downloaded the software would have bought it. To assume that I would pay $10k for a peice of software that I could replace with free GNU OR ma'b I just use it as a hobby and would've just downloaded MS 2k8 express for free from MS directly instead of the full blown version.

    the REAL pirates aren't 'everyday' consumers, but people who make $$$ like an ecommerce business using a pirated SQL 2k8 or someone who NEVER buys DVDs.

    An example of a normal person would be me watching South Park for free on the internet from sites like SouthParkZone. There are no commercials so Tray/Matt/Commedy Central will never see a dime from that, but once I get past my immediate college debt, I'm buying the entire series on DVD.

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